SERVICE QUALITY AND CUSTOMER …...customer satisfaction and service quality are antecedents of customer loyalty. In addition to customer loyalty, customer satisfaction significantly

UNIVERSITY OF CAPE COAST

SERVICE QUALITY AND CUSTOMER SATISFACTION OF GHANA

WATER COMPANY LIMITED: A STUDY OF CUSTOMERS IN THE

ACCRA METROPOLIS

JOHN BADU

2016

© University of Cape Coast https://erl.ucc.edu.gh/jspui

Digitized by Sam Jonah Library


SERVICE QUALITY AND CUSTOMER SATISFACTION OF GHANA

WATER COMPANY LIMITED: A STUDY OF CUSTOMERS IN THE

ACCRA METROPOLIS

BY

JOHN BADU

Dissertation submitted to the Department of Accounting and Finance, College

of Humanities and Legal Studies, University of Cape Coast, in partial

fulfillment of the requirements for award of Master of Business

Administration Degree in General Management

FEBRUARY 2016



ii

DECLARATION

Candidate's Declaration

I hereby declare that this dissertation is the result of my own original research

and that no part of it has been presented for another degree in this university or

elsewhere.

Candidate's Signature: .................................. Date: ............................

Name: John Badu

Supervisors' Declaration

I hereby declare that the preparation and presentation of the dissertation were

supervised in accordance with the guidelines on supervision of dissertation

laid down by the University of Cape Coast.

Supervisor's Signature: .............................. Date: ................................

Name: Mr. Samuel Kwaku Agyei



iii

ABSTRACT

Customers buy goods and services for value and utility (quality and

satisfaction). Ghana Water Company Limited (GWCL) as a utility company is

mandated to provide portable or quality water for human consumption in the

urban areas of Ghana but it had been criticized over time for poor services.

This study was therefore undertaken for the purpose of examining the

relationship between service quality and customer satisfaction of GWCL in the

Accra Metropolis. The design for the study was a descriptive survey. The

purposive sampling, stratified random sampling technique and the

convenience sampling method were used in selecting the sample. In all, 125

customers of GWCL’s were used. Questionnaire was the main instrument used

for the collection of data. Data were analysed using frequencies, percentages,

means, standard deviations and the one-sample t-test.

Results of the study revealed that customers were not satisfied with

the quality of service by GWCL in the Accra metropolis. It was also indicated

that the level of average satisfaction was quite low with respect to GWCL

monthly billing and physical facilities. However, with regards to providing

complete and accurate information and quotation, customers had their

complaint unresolved. It also revealed that GWCL occasionally notified its

customers for major repairs and maintenance schedules while majority of their

service interruptions were not communicated to its consuming populace. It

was recommended that Management should ensure accurate monthly billing

and improve upon its physical facilities especially offices and major

installations and should inform customers before supply is interrupted to

improve public relations to ensure service quality.



iv

ACKNOWLEDGEMENTS

I am grateful to my supervisor, Mr. Samuel Kwaku Agyei of the

School of Business, University of Cape Coast for his invaluable ideas,

contributions, criticisms and encouragement in making this work a success.

My appreciation also goes to Mr. Benard Boachie and Mr. Prince Asiamah for

their insightful counsel, directions and the initial editing of the work. My

appreciation goes to my family especially, my late wife, Mrs. Christiana Badu

for her diverse sacrifices, support and encouragement. I owe my children;

Caleb Aboagye Badu, Akua Apeanimaa Badu and Christiana Afua Abbey

Badu a debt of gratitude for their moral support and endurance.



v

DEDICATION

To my late wife, Mrs. Christiana Badu



vi

TABLE OF CONTENTS

Page

DECLARATION ii

ABSTRACT iii

ACKNOWLEDGEMENTS iv

DEDICATION v

LIST OF TABLES x

LIST OF FIGURES xi

CHAPTER ONE: INTRODUCTION 1

Background to the study 1

Statement of the problem 7

Research objectives 9

Research questions 10

Significance of the study 10

Delimitation of the study 10

Organisation of the rest of the study 11

CHAPTER TWO: REVIEW OF RELATED LITERATURE 12

Introduction 12

Theoretical review 12

Definition of service quality 14

Characteristics of services 19

The service quality model 21

Dimensions of SERVQUAL method 23

Meaning of customer satisfaction 24

Importance of customer satisfaction 27



vii

Relationship between service quality and customer

satisfaction 28

Variable identification 31

Empirical review 31

CHAPTER THREE: METHODOLOGY 36

Introduction 36

Study organisation/study area 36

Research design 38

Population 39

Sample and sampling procedures 39

Instrument for data collection 41

Data collection procedures 42

Ethical considerations 42

Data analysis 44

CHAPTER FOUR: RESULTS AND DISCUSSIONS 45

Introduction 45

Socio-demographic characteristics 45

Customers’ satisfaction of the quality of service offered by GWCL 48

Customers’ responsiveness to satisfaction and dissatisfaction 50

Relationship between service quality and customer

Satisfaction of GWCL 52

Customers’ perception regarding the quality of service delivery at

GWCL in Accra Metropolis 57



viii

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND

RECOMMENDATIONS 64

Introduction 64

Summary of findings 64

Conclusions 67

Recommendations for policy and practice 67

Limitations of the study 68

Suggestion for further research 68

REFERENCES 69

APPENDICES 80

A Questionnaire for customers 81



ix

LIST OF TABLES

Table Page

1 Variable identification 31

2 Stratified sample size for Accra Central District of GWCL

as at July 2014 40

3 Gender, age and marital status of respondents 46

4 Cross tabulation for employment status, educational

qualification and monthly income 47

5 Customers satisfaction about the quality of service by GWCL 49

6 Customers’ responsiveness to satisfaction 51

7 Customers’ responsiveness to dissatisfaction 52

8 Customers’ satisfaction ratings 53

9 Model summary 53

10 Respondents’ water usage category 58

11 Major consumers perception indicators 58

12 One-sample t-test 60

13 Customers’ perception on the quality of service provided

by GWCL 62



x

LIST OF FIGURES

Figure Page

1 The gaps model of service quality 22

2 Customer perceptions of quality and customer satisfaction 30



1

CHAPTER ONE

INTRODUCTION

Background to the Study

The world around us is not only changing but also evolving rapidly; no

one disagrees about that. World changes are also reflected in world markets

and thus affect the way businesses are conducted, products and services are

produced and delivered, and customer relationships are built and managed.

The major change that cannot be ignored is globalization. Globalization is

defined as “the intensification of world-wide social relations which link distant

localities in such a way that local happenings are shaped by events occurring

many miles away and vice versa” (Giddens, 1990). To strive in a market

characterized by globalization, strong and ruthless competition, and fast

technological advancements, companies need to be more customer-focused to

survive, let alone to lead.

Trends that accompany the 21st century's business markets include

rapid globalization, a call for more ethics and social responsibility, increased

diversity, a focus on and demand for quality, competition and of course

digitalization (Schermerhorn, 2007; Kotler & Armstrong, 2010). Technology

is one of the major macro-environmental factors that affect today's businesses

(Armstrong & Kotler, 2011) in terms of what they provide, how they provide

it, and what the customer really wants. Political and economic instabilities also

affect businesses' need to secure their position and ensure sustainability. Not



2

to forget the influence of changing demographics of the market place, the

evolving customer needs, and the necessity to comply with the different

cultures of the various markets.

Great variations are accompanying the economic changes where the

main characteristics of the past economy were mass production and mass

consumption of products; while the current economy depends on producing

and consuming goods and services that are more differentiated (Fornell,

Johnson, Anderson, Cha, & Bryant, 1996). There is substantial support in the

literature reviewed for both market share and customer satisfaction to be

leading to profitability although there is no certainty that these two are related

positively but more likely to be related negatively (Fornell, 1992); this means

that poor satisfaction is associated with poor profitability.

Generally, customers occupy a great share of consideration in

business strategies. Business strategies constitute offensive and defensive

strategies where the objective of offensive strategies is to acquire new

customers or to capture market share, and the objective of defensive strategies

is to maintain current customers and avoid losing them to the competition by

creating customer satisfaction (Fornell & Wernerfelt 1987, 1988 and Fornell,

1992). These strategies are used when there is no hope for the company to

grow except by snatching business from rivals due to slow growth and

saturated markets (Fornell, 1992). Therefore, customer needs and causes for

satisfaction should not be ignored when designing business strategies. To

protect one’s market share, markets, and products, companies aim to have

customers who are highly satisfied as a form of defensive strategy to minimise



3

the number of customers exiting or switching to competitors (Fornell &

Wernerfelt, 1987; 1988; Fornell, 1992).

Such strategies seek customer turnover reduction and customer

retention maximization (Fornell & Wernerfelt, 1987, 1988) in two ways:

increasing switching barriers and increasing customer satisfaction (Fornell,

1992). Given the slowly growing markets that are characterized by intense

competitiveness, defensive strategies are necessary since some companies try

to grow by capturing market share from others. So companies with no strong

defense; that is, defensive strategy, will eventually be the primary losers of

market share (Fornell, 1992). Not all industries are affected in the same way

by customer satisfaction in terms of loyalty and repeat purchases (Fornell,

1992).

While Oliver (1997) declares that customer satisfaction is linked to

customer retention and customer loyalty, Fornell (1992) declares that there is

no proof that customer loyalty leads to satisfaction although there is evidence

that the opposite is true: satisfied customers eventually become loyal

customers (Fornell, 1992). Moreover, Lovelock & Wirtz (2011) confirm that

customer satisfaction and service quality are antecedents of customer loyalty.

In addition to customer loyalty, customer satisfaction significantly affects

repeat sales and word-of-mouth (Bearden & Teel, 1983; Anderson & Sullivan,

1993).

The importance of achieving high levels of customer satisfaction has

increased as world markets are becoming more competitive and service

industries are continuously growing (Anderson, Fornell, & Rust, 1997). It is

evident that the role that service industries play in contributing to the whole



4

economy, in almost all economies, is significant (Ndhlovu & Senguder, 2002).

Given the fierce competition among service companies, many are attempting

to find new means of differentiation in hope to be set apart from rivals

(Ndhlovu & Senguder, 2002).

As a result, service quality has emerged as the new way of

differentiation, leading to the creation of a new competitive advantage

(Ndhlovu & Senguder, 2002). In general, quality is regarded as a competitive

precedence for managers and a driver of growth; therefore, quality

improvement has become a mission for most firms (Legcevic, 2008). With

respect to services, it is obvious that one indicator of a company’s success is

how its customers perceive the level of service quality, where perceived

service quality appears to be an antecedent of perceived value (Kumar, Kee, &

Manshor, 2009)

Business success depends on a firm’s understanding and meeting

customers’ needs and demands. In Ghana, utility provision has always

suffered a setback as utility firms have always been criticized for poor quality

of services of which Ghana Water Company Limited (GWCL) is no exception.

Service quality and customer satisfaction are inarguably the two core concepts

in marketing theory and practice (Spreng & Mackoy, 1996). One important

utility in an economy is water service and the provision of quality water for

human consumption in an economy cannot be over emphasised. It is the most

essential necessity of life after oxygen. Anything that disturbs the provision

and supply of water therefore tends to disturb the very survival of humanity.

In this vein, the World Health Organisation (WHO) came out with

drinking water standards in 1993 to ensure quality water production. The



5

Ghana Standards Authority (GSA) and Public Utility Regulatory Commission

(PURC) were also established by the Government of Ghana to regulate public

utility organisations within the frame work of set standards. Both GSA and

PURC ensure that water produced by GWCL meets the required chemical and

bacteriological parameters. PURC also regulates the activities of GWCL so

that customers are fairly treated. GWCL is mandated to meet the ever

increasing demand for better service delivery through efficient and effective

management of its core business of production and distribution of portable

water management in the urban areas of Ghana (GWCL, 2014).

However, the company is beset with lots of customer/consumer

complaints with respect to quality of service including poor water quality, pipe

burst, leakages, no flow, high billing, un-reflected payments and unlawful

disconnection among others. It has been noticed of late that

customers/consumers of GWCL in poor/no flow areas spend much of their

hard earned income on satchet/bottled water, expensive tanker services and

borehole construction. This indicates that there is a gap between customers’

expectation of water services and the perceived delivery of water by GWCL.

One definition of customer satisfaction obtained from Kotler and

Armstrong (2004) states that customer satisfaction is the extent to which a

product’s perceived performance matches a buyer’s expectation. In today’s

world of intense competition, the key to sustainable competitive advantage lies

in delivering high-quality service that will in turn lead to customer

satisfaction. Customer satisfaction has become one of the most critical

marketing priorities because it is generally assumed to be a significant



6

determinant of repeat sales, positive word-of-mouth, and customer loyalty

(Shemwell, Yavas, & Bilgin, 1998).

In order for a company’s offer to reach customers, there is a need for

services. These services depend on the type of product and services and differ

in the various organisations. Service is an intangible offer by one party to

another in exchange of money for pleasure. Thus, total water service delivery

in the utility industry encompasses both tangible (water and physical facilities)

and intangible (employee-customer interaction) components. A proper

combination of the tangible and intangible aspects should result in a

customer’s perception of high service quality, which in turn should lead to

attaining customer satisfaction and positive behavioural intention in the utility

industry.

This implies that in a marketing context, quality means a product’s

ability to satisfy a customer’s need or requirements. The focus of this

definition is on the customer and how the customer thinks a product would

satisfy some purpose. Quality and satisfaction are dependent on the total

product offering. What are the qualities of services provided to customers?

Are the customers satisfied with these services? In fact, their satisfaction is the

most important tool that helps to increase sales and generate profits in the

business environment. Moreover, the importance of customer satisfaction and

service quality has been proven relevant to help improve the overall

performance of organisations (Magi & Julander, 1996).

Several researches have been conducted in the service sector mostly in

the financial and telecommunication industries but very limited researches

have been conducted on the services provided by a utility company like



7

GWCL especially linking service quality to customer satisfaction with

portable water services. Agyapong (2010) studied the relationship between

service quality and customer satisfaction in the utility industry (telecom) in

Ghana. Multiple regression analysis was used to examine the relationships

between service quality variables and customer satisfaction. The results

showed that all the service quality items were good predictors of customer

satisfaction. Kabir and Carlsson (2010) also studied the expectations,

perceptions and satisfaction about service quality in Destination Gotland by

using quantitative case-study on service quality and customer satisfaction. The

results from the different dimensions showed that there was a gap between

expectations and perceptions which means that the customers were not fully

satisfied about the service quality at Destination Gotland.

Throughout the researcher’s observation, it looks customers were not

satisfied with the service rendered to them in terms of water supply. Accra

being the capital town of Ghana and a cosmopolitan in nature, it is also faced

with customers dissatisfied with services of GWCL. It is therefore necessary

to conduct a study about the service quality and customer satisfaction of

Ghana Water Company Limited in the Accra metropolis.

Statement of the Problem

Over the last few years, companies have focused on satisfying their

customers by improving and observing set standards to ensure quality service.

Most companies are adopting quality management programmes which aim at

improving the quality of their products and marketing processes, because it

has been proven that quality has a direct impact on product performance, and

thus on customer satisfaction (Kotler, 2002). Similarly, many organisations



8

have formalised their interest in providing quality products by undertaking

total quality management (TQM) programmes. TQM is an organisation-wide

commitment to satisfying customers by continuously improving every

business process involved in delivering products or services (Boachie-Mensah,

2009). Are the companies providing the actual qualities perceived by the

customers/consumers? Are the customers satisfied because of the products or

service quality? The reason for this is to satisfy the customers.

Ghana Water Company Limited (GWCL) is a utility organisation

which is mandated to meet the ever increasing demand for better service

delivery through efficient and effective management of production and

distribution of portable water and customer management in the urban areas of

Ghana. It has a vision to become a world class utility company delivering

quality and acceptable services based on its distinctive and best practice in the

water industry in Ghana. However, there are lots of water shortages, customer

complaints to PURC in urban areas including Accra Metropolis. Intermittent

water flow leads to loss of customers and revenue to the company.

Also, available statistics show that Ghana’s major cities of Accra and

Tema consume 150 million gallons of water per day but the current

infrastructure can only provide 93 million gallons (McTernan, 2013). This

means that there is a deficit of 57 million gallons of water to be produced per

day. When the company improves the gap between customers’ expectation

and their experience, it will result in higher customer satisfaction and customer

loyalty/retention which will consequently lead to improved performance and

healthy lifestyle of its customers since it is said that ‘Water is life’.



9

With relevant development in water delivery in Accra following the

construction of the Desalination plant at Teshie and the Kpong plant

expansion project which promises increase in production volumes to the

Adentan Municipality and many areas with low or no flow of water, the recent

increase in water tariff as a result of the depreciation of the cedi and inflation,

the expectation of customers has risen. To what extent are GWCL able to meet

these expectations? As posited by Kotler et al (2002), quality can be defined as

the totality of features and characteristics of a product or service that bear on

its ability to satisfy stated or implied needs. The study therefore seeks to find

out the extent to which GWCL is able to meet the expectation of its customers

in the Accra Metropolis.

Research Objectives

The general objective of the study was to examine the relationship

between service quality and customer satisfaction of GWCL in Accra

Metropolis. In order to achieve the general objective, the following specific

objectives were pursued:

1. Ascertain customers’ satisfaction of the quality of service offered by

GWCL in Accra Metropolis;

2. Assess the relationship between service quality and customer

satisfaction of GWCL in Accra Metropolis and

3. Examine customers’ perception of the quality of service delivery at

GWCL in Accra metropolis.



10

Research Questions

In order to achieve the above objectives, the following research

questions were used:

1. What is the extent of customer satisfaction of quality of service offered

by GWCL in Accra Metropolis?

2. What is the relationship between service quality and customer

satisfaction of GWCL in Accra Metropolis?

3. What are customers’ perception regarding the quality of service

delivery at GWCL in Accra metropolis?

Significance of the Study

The findings of this study will contribute to the available literature in

service quality and customer satisfaction in the water sector. It will form a

basis of recommendation which will serve as policy guide to policy makers in

the water sector. This study will enlighten customers to appreciate the

challenges of GWCL and persuade them to remain loyal to the company. It is

expected to provide scientific justification for not only the continuous

existence and expansion of GWCL’s projects, but also its water coverage

nationwide. Finally the study will help GWCL to be customer centric in terms

of water quality and service delivery to meet customer satisfaction.

Delimitation of the Study

In carrying out this research, the researcher found out that GWCL

operates in all the 10 regions and major cities in Ghana with large customer

base. Also the city of Accra being the capital city of Ghana and assuming

cosmopolitan status, a complete research on all GWCL customers would be



11

very difficult if not impossible. Hence, the scope of this study was limited to

customer satisfaction through quality service delivery in the water sector with

particular attention to GWCL in the Accra Metropolis.

Organisation of the Rest of the Study

This dissertation was organised into five main chapters. Chapter two

reviewed available literature related to the study. It focused on the theoretical

and empirical framework of service quality and customer satisfaction.

Chapter three dealt with the research methodology which included the study

organization/area, research design, population, sample and sampling

procedure, instrument for data collection, data collection procedures, ethical

considerations and data analysis. Chapter four looked at the results and

discussion while chapter five completed the report with summary of key

findings, conclusions and recommendations of the study.



12

CHAPTER TWO

REVIEW OF RELATED LITERATURE

Introduction

The purpose of this chapter was to undertake both theoretical and

empirical review of literature that relates to the topic. It covered the definition

of service quality, characteristics of service, service quality model, dimensions

of SERVQUAL (service quality) model. The rest were meaning of customer

satisfaction, importance of satisfaction, relationship between quality service

and customer satisfaction, and the empirical review.

Theoretical Review

Theory is the coherent group of assumptions put forth to explain the

relationship between two or more observable facts and to provide a sound

basis for predicting future events. It is also a set of principles on which one

activity is based (Essaw, 2014). Theoretical review therefore means delving

into the existing knowledge base or writings by experts in the field, to find out

what have been written about the topic the researcher is interested in

investigating. In this regard, this section will delve into writings about service

quality and customer satisfaction to form a base on which this research would

be founded.

The significance of customer satisfaction is increasingly growing for

both consumer researchers and marketers from the theoretical and managerial

point-of-view (Mishra, 2009). Hundreds of studies have researched customer



13

satisfaction in different industries across various countries. Several research

studies uncovered the different types of satisfaction (Oliver, 1980), approaches

and concepts (Westbrook & Reilly, 1983; Oliver, 1993), antecedents (Fornell

et al., 1996), and consequences (Fornell & Wernerfelt, 1987; Fornell et al.,

1996). Moreover, from the managerial point-of-view, customer satisfaction

has become a strategic goal for most corporations (Mishra, 2009). In a

nutshell, customer satisfaction is “fundamental to the well-being of individual

consumers, to the profits of firms supported through purchasing and

patronization, and to the stability of economic and political structures” (Oliver,

2010).

As for service quality, it is becoming an increasingly serious and

important concern across all service industries and as a major means for

creating and sustaining a competitive advantage in the market (Marla, 1996).

Once again, numerous studies were conducted on service quality in different

industries such as banking, general retailing, telecommunications, and utilities.

Moreover, service quality was investigated across various countries; to name a

few: USA, India, UK, UAE, China, Malaysia, Cyprus, South Korea, and

Bangladesh. Several studies concluded with service quality models and

presented them as instruments to measure service quality, such as

SERVQUAL (Parasuraman, Berry, & Zeithaml, 1988) and SERVPERF

(Cronin & Taylor, 1992).

Theoretically, service quality was confirmed as a major antecedent of

customer satisfaction in several research studies such as that of Woodside,

Frey, and Daly (1989), Cronin and Taylor (1992), Oliver (1993), Spreng and

MacKoy (1996), and Lee, Lee and Yoo (2000). Managerially, service quality



14

is becoming a major component integrated into firm’s competitive strategies

(Newman, 2001). Legcevic (2008) asserted that for organisations to

effectively and efficiently deal with the areas that contribute to their

competitive advantage, they need to be knowledgeable about perceived service

quality in terms of its constituencies and foundation. More importantly, it has

been suggested that service firms who experienced poor performance did not

know their customers well in terms of their expectations of service quality

(Zeithaml, Berry, & Parasuraman, 1993).

Definition of Service Quality

Service quality has been the main focus of many studies in the field of

services marketing (Karatepe, 2011); nevertheless, there is no universally

agreed upon definition of service quality (Legcevic, 2008), although most of

them are close in meaning. Before presenting the different definitions of

service quality, the term “quality” should be discussed. Quality has been

generally defined as the customer’s overall impression of the relative

inferiority or superiority of the organisation and its services (Spathis, Pteridou,

& Glaveli, 2004). Whereas service quality is considered the “perceived

quality” of services (Lee & Hwan, 2005) and a “complex construct”

(Karatepe, 2011). It is distinct from “objective or actual quality” since it is

based on consumer judgment (Lee & Hwan, 2005).

Lewis and Bernard (1983), in their definition of service quality

declared that it is “a measure of how well the service level delivered matches

customer expectations. Delivering quality service means conforming to

customer expectations on a consistent basis” (p. 99-107). However, according

to Spathis et al. (2004), perceived service quality is a customer’s “judgment on



15

the overall service”; hence, it is an “attitude”. Moreover, Fogli (2006) present

a similar definition declaring that service quality is “a global judgment or

attitude relating to a particular service” and add that service quality is “a

cognitive judgment”. Therefore, the focus in this study is on the subjective

perception of service quality; that is, from the point of view of customers

trying to understand their own perceptions and find a better way to serve them.

Furthermore, as stated in Nam (2008), Zeithaml, Berry, and

Parasuraman (1990) defined service quality as: “the customer’s overall

impression of the relative inferiority or superiority of the organisation or its

services”; thus, it can be concluded that the reputation of the organisation is

implicit. Gronroos (1983) defines service quality as “the fulfillment of

customers’ expectations” (Al-Tamimi, Lafi, & Uddin, 2009). This is very

similar to what Boomsma (1991) suggested, as cited in Legcevic (2008),

declaring that, to be effective in providing good quality, companies must

deliver services that meet to a maximum extent what the customer requires.

In contrast, Lewis (1989) and Zeithaml and Bitner (1996) regard

quality as providing a service superior to what customers expect. Moreover, as

cited in Legcevic (2008), Peters and Austin (1985) present a simple definition

of service quality saying that it is “the superiority or excellence as perceived

by the customer” and the “product of the effort that every member of the

organisation invests in satisfying customers”. Wicks and Roethlein (2009)

who examined the different definitions and related concepts of quality came to

a conclusion that quality – applicable to goods and services - should be

defined as: “the summation of the affective evaluations by each customer of

each attitude object that creates customer satisfaction, where the term



16

customer is defined as any internal or external stakeholder of the organisation

and an attitude object is defined as the particular entity of interest”.

Parasuraman et al. (1988) present perceived service quality as ``a

global judgment, or attitude, relating to the superiority of the service''.

Customer-perceived service quality or perceived service quality has been

defined theoretically as customers’ views or evaluations of the discrepancy

between previous expectations and the actual service delivered based on

various components of the service experience (Brown & Lam, 2008), a very

similar definition to that presented in Wisniewski (2001). This is very close to

Fornell’s (1992) definition of customer satisfaction that “customer satisfaction

is expressed as a function of pre-purchase expectations and post-purchase

perceived performance (of the respective product/service)”; noting that

expectations may be due to the effect of advertising and/or other customers’

recommendations through word-of-mouth communication.

It is important to differentiate between “expectations” as a term used in

service quality literature and a term used in the customer satisfaction literature.

Parasuraman et al. (1988) present this differentiation by declaring that

expectations, as used in customer satisfaction literature, represents the

“predictions” made by consumers about what might occur during a

forthcoming exchange or transaction; for example, according to Oliver (1981),

“it is generally agreed that expectations are consumer-defined probabilities of

the occurrence of positive and negative events if the consumer engages in

some behavior” (Oliver, 1981). While in service quality literature,

expectations represent consumer wants or desires and what they “feel” they



17

should be offered by a service provider instead of what they feel would be

offered (Parasuraman et al., 1988).

Parasuraman, Zeithaml, & Berry (1985, 1988) present service quality

as an antecedent of customer satisfaction while Bitner (1990) and Bolton and

Drew (1991a) argue that service quality is an outcome of customer

satisfaction. But Cronin and Taylor (1992) conducted a thorough analysis and

provided empirical support that service quality leads to customer satisfaction,

the notion taken in this study. Customer-perceived service quality and

customer satisfaction have been both related to perceived performance in

comparison to expectations; that is, actual performance compared to expected

performance. Dominantly agreed is that they represent separate but strongly

related concepts where customer-perceived service quality represents the

cognitive aspect of the service offered and customer satisfaction represents the

"affective response" emotional reaction as a result (Brady, Knight, Cronin,

Hult, & Keillor, 2005; Brown & Lam, 2008; Oliver, 2010).

It is said that communication and relations between customers and

front-line employees, in different service environments, is expected to

significantly have an effect on how customers perceive their purchase and

consumption experience (Brown & Lam, 2008). Because of that, contact

employees’ attitudes and behaviors play a great role in shaping service quality

perceptions of customers (Kohli & Jaworski, 1990; Lee et al., 2000). Shahin

and Janatyan (2011) declare that the evaluation of service quality is formed

during the process through which that service is delivered and thus, each time

a customer is in contact with the service provider, there exists an opportunity

to create a satisfying or dissatisfying encounter with that customer.



18

Therefore, customers are often satisfied when engaging in superior

interactions with service providers even if problems exist in the delivery of the

service. Moreover, when customers are dissatisfied with the interaction there

is a probability that the service encounter be impaired (Brown & Lam, 2008).

Since perception of service quality influences customer satisfaction, it

ultimately affects purchase intentions. Lee et al. (2000), suggest that the

responsiveness of contact employees is significantly related to whether

companies have a culture that values excellent services. Because customers

usually perceive service providers as the organisation, where their attitude is

communicated directly and indirectly during the interactions, this may have a

long-term impact on customers’ satisfaction, repeat purchases, and the

profitability of the organisation, which is not often valued by the service

providers and company managers (Schneider & Bowen, 1995; Brown & Lam,

2008).

Consequently, service providing companies, especially those that are

people-based, need to work on boosting employees’ responsiveness through

incentive programs to increase motivation, enhance selling skills, improve

attitudes, clarify role perceptions, and increase the level of knowledge about

the service itself and organisational policies that value the customer.

Accordingly, service quality would improve dramatically and thus

organisational effectiveness will increase as sales grow and new customers are

attracted (Bush, Bush, Ortinau, & Hair, 1990; Lee at al., 2000).

A service is any act or performance that one party can offer to another

that is essentially intangible and does not result in the ownership of anything.

Its production may or may not be tied to a physical product (Kortler, 2002).



19

Services are economic activities offered by one party to another in exchange

for money, time, and effort. Service customers expect value from access to

goods, labour, professional skills, facilities, networks and systems; but they do

not normally take ownership of the physical elements involved (Lovelock &

Wirtz, 2011).

Quality can be defined as the totality of features and characteristics of

a product or services that bear on its ability to satisfy stated or implied needs

(Kotler, Armstrong & Saunders, 2002). It is evident that quality is also related

to the value of an offer, which could evoke satisfaction or dissatisfaction on

the part of the user. According to Boachie-Mensah (2009), quality is the

degree of excellence or superiority that an organisation’s product possesses.

Quality can encompass both the tangible and intangible aspects of a firm’s

products or services. In a technical sense, quality can refer to physical traits

such as features, performance, reliability, durability, aesthetics, serviceability,

and conformance to specifications. Although quality can be evaluated from

many perspectives, the customer is the key perceiver of quality because his or

her purchase decision determines the success of the organisation’s product or

service.

Characteristics of Services

Services have four major characteristics that greatly affect the design

of marketing programmes: intangibility, inseparability, variability, and

perishability (Kotler, 2002). Services are intangible. Unlike physical products,

services cannot be seen, tasted, felt, heard, or smelled before they are bought.

The person who is getting a face lift cannot see the exact results before the

purchase, just as the patient in the psychiatrist’s office cannot know the exact



20

outcome before treatment. To reduce uncertainty, buyers will look for signs or

evidence of the service quality. They will draw inferences about quality from

the place, people, equipment, communication material, symbols, and price that

they see. Therefore, the service provider’s task is to manage the evidence to

tangibilise the intangible.

Services are inseparable in that services are typically produced and

consumed simultaneously, unlike physical goods, which are manufactured, put

into inventory, distributed through resellers, and consumed later. If a person

renders the service, then the provider is part of the service. Because the client

is also present as the service is produced, provider-client interaction is a

special feature of services marketing—both provider and client affect the

outcome. Often, buyers of services have strong provider preferences. Several

strategies exist for getting around this limitation. One is higher pricing in line

with the provider’s limited time. Another is having the provider work with

larger groups or work faster. A third alternative is to train more service

providers and build up client confidence.

Services depend on who provides them and when and where they are

provided, they are highly variable. Knowing this, service firms can take three

steps toward quality control. The first is recruiting the right service employees

and providing them with excellent training. This is crucial regardless of

whether employees are highly skilled professionals or low-skilled workers.

The second step is standardising the service-performance process throughout

the organisation. The third step is monitoring customer satisfaction through

suggestion and complaint systems, customer surveys, and comparison

shopping. Services are perishable and cannot be stored; once an airplane takes



21

off or a movie starts, any unsold seats cannot be held for future sale.

Perishability is not a problem when demand for a service is steady, but

fluctuating demand can cause problems.

In servicescape, because the service is generally produced and

consumed simultaneously, the consumer is "in the factory", often experiencing

the total service within the firm's physical facility. The factory (or the place

where the service is produced) cannot be hidden and may in fact have a strong

impact on customers' perceptions of the service experience. Research suggests

that the physical setting may also influence the customer's ultimate satisfaction

with the service (Bitner, 1992). Service inseparability means that services

cannot be separated from their providers, that is, services are produced and

consumed simultaneously. This implies that the service provider (people or

machines) is a part of the service. Service variability means services are

variable while goods are usually uniform. This means that the quality of

services depends on who provides them, as well as when, where and how they

are provided. Service perishability means that services, unlike physical goods,

cannot be stored or inventoried for later use or sale. This perishability nature

of services means that unused service capacity and revenue is lost forever.

The Service Quality Model

This model has five gaps that present service quality as the result of the

discrepancy between customer’s perception and expectation of the service and

the real performance based on certain quality dimensions. The main focus of

the gap model is the customer gap (Gap 5 of fig. 1) which represents the

difference between customer expectations; the reference points customers

have as they begin the service experience, and perceptions; the service as



22

actually received by these customers. The idea of this model is that marketers

should close this gap for the purpose of boosting customer satisfaction and

building long-term relationships with them. This gap can be closed if the four

other gaps, which are at the marketer’s side, are closed.

Figure 1: The gaps model of service quality

Gap 1 represents not knowing what customers expect, Gap 2 represents

not selecting the right service designs and standards, Gap 3 represents not

delivering up to the service standards while Gap 4 represents not matching

performance to promises (Zeithaml & Bitner, 2000). Parasuraman et al.

(1988) said that in service and retail business, SERVQUAL is a multi-item

scale which is developed to assess customer perceptions of service quality.

The author also argued that SERVQUAL must be reliably assessed and



23

measured in order to improve services quality. He mentioned that

SERVQUAL is an important model to identify the gaps between customer

expectations of the service and their perceptions of the actual performance of

the service.

Dimensions of SERVQUAL Method

Zeithaml, Berry and Parasuraman (1990) identified 10 criteria used by

consumers in evaluating service quality. In subsequence research they found a

high degree of correlation between several of these variables and so

consolidated them into five broad dimensions. These authors described that

tangibles are about the physical facilities, equipment, and appearance of

personal and presence of users and it is also important for creating a good

atmosphere. This dimension aspect of a service is one of the few dimensions

that a potential service provider can know and evaluate in advance of

participation.

Reliability means that the service company has to be able to perform

the promised service dependably and accurately. It also creates organisation’s

promotional effort which can contribute to participant expectations. Generally,

performance at the highest standard is crucial to reliability. Responsiveness

refers to the willingness to help participants and give prompt attentiveness.

The customers expect their request to be solved quickly and perfectly.

Assurance means that the customers want to rely on courteous and

knowledgeable employees who convey trust and confidence.

The last dimension, empathy is associated with caring, personnel that

takes care of users. Empathy also indicates good understanding of the

customer’s needs and wants. Zeithaml et al. (1990) mentioned that Assurance



24

and Empathy contain items that are representing seven original dimensions:

communication, credibility, security, competence, courtesy,

understanding/knowing customers, and access. They did not remain distinct

throughout the several refinements over the years which led to the extended

service quality model. Parasuraman et al. (1988) mentioned that, the purpose

of SERVQUAL is to serve as a diagnostic tool for identifying an

organisation’s service quality, weakness and strengths which are uncovered.

The SERVQUAL instrument creates a systematic, multi-stage and interactive

process that consist of verifying the dimensions and items which correspond to

the certain company and industries.

Meaning of Customer Satisfaction

A customer is a person, company, or other entity which buys goods

and services produced by another person, company, or other entity. According

to Solomon (2007), those who buy the goods or services provided by

companies are customers. In other words, a customer is a stakeholder of an

organisation who provides payment in exchange for the offer provided to him

by the organisation with the aim of fulfilling a need and to maximise

satisfaction. Sometimes the term customer and consumer are confusing. A

customer can be a consumer, but a consumer may not necessarily be a

customer. A customer is the person who does the buying of the products and

the consumer is the person who ultimately consumes the product.

Satisfaction is the consumer’s fulfillment response. It is a judgment

that a product or service feature, or the product or service itself, provided (or is

providing) a pleasurable level of consumption-related fulfillment, including



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levels of under or over-fulfillment (Oliver, 2010). Customer satisfaction is a

term frequently used in marketing. It is a measure of how products and

services supplied by a company meet or surpass customer expectation.

Customer satisfaction is defined as the number of customers or percentage of

total customers, whose reported experience with a firm, its products, or its

services (ratings) exceeds specified satisfaction goals (Wiki-Loves-Earth,

2014).

When a consumer/customer is contented with either the product or

services, it is termed satisfaction. Satisfaction can also be a person’s feelings

of pleasure or disappointment that results from comparing a product’s

perceived performance or outcome with their expectations (Kotler & Keller,

2009). As a matter of fact, satisfaction could be the pleasure derived by

someone from the consumption of goods or services offered by another person

or group of people; or it can be the state of being happy with a situation.

Satisfaction varies from one person to another because it is a utility.

“One man’s meal is another man’s poison,” an old adage stated

describing utility; thus highlighting the fact that it is sometimes very difficult

to satisfy everybody or to determine satisfaction among group of individuals.

Customer satisfaction has been a subject of great interest to organisations and

researchers alike. The principal objective of organisations is to maximise

profits and to minimise cost. Profit maximisation can be achieved through

increase in sales with lesser costs. One of the factors that can help to increase

sales is customer satisfaction, because satisfaction leads to customer loyalty,

recommendation and repeat purchase (Wilson, Zeithaml, Bitner & Gremler,

2008).



http://en.wikipedia.org/wiki/Marketing

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A nation whose industry generates high levels of customer satisfaction

is probably better protected against cost increases as well as foreign

competition (Fornell, 1992). Churchill and Surprenant (1982) stated that the

notion of customer satisfaction is focal to the science of marketing and its

applications. Satisfaction is a critical result of any marketing activity since it

ties the procedures terminating in the acquisition and usage of goods and

services with post purchase experiences like a change in attitude, buying

recurrences, and loyalty toward the brand. Anderson and Fornell (1994)

declare that “customer satisfaction drives future profitability”. The importance

of this phenomenon to marketing is that financial gains are created after

satisfying needs and wants of customers (Churchill & Surprenant, 1982).

In a similar context, customer satisfaction has become a focal point in

business such that it forms part of the marketing concepts. According to the

Chartered Institute of Marketing (CIM) of the UK, “marketing is the

management process responsible for identifying, anticipating and satisfying

consumer requirements profitably” (CIM Marketing Dictionary, 1996). The

key feature of this definition is that it places the consumer at the centre of the

organisation’s activities. It could be simplified as: Identifying consumer

requirements + Anticipating consumer requirements + Satisfying consumer

requirements = Profitability. If consumers are not satisfied they would seek

alternatives elsewhere. Consumers want their requirements to be met. They

will look for particular benefits. They will want the right goods or services,

available at the right price, at the right time, and in the right place (Boachie-

Mensah, 2009).



27

Importance of Satisfaction

Customer Satisfaction is today considered as a valuable marketing

performance metric. Customer satisfaction measurement has been gaining

importance in business practices especially for the last decade. The metric is

getting popular since, customer satisfaction is a forward looking indicator of

business success that measures how well customers will respond to the

company in the future. Other measures of market performance, such as sales

and market share, are backward looking measures of success. They tell how

well the firm has done in the past, but not how well it will do in the future

(Byrne, 1993).

From the view of operations management, it is obvious that customers

play important roles in the organisational process (Lee & Ritzman, 2005).

Before the placement of strategies and organisational structure, the customers

are the first aspect considered by managements. The questions asked in the

strategic planning ranges from who will need to consume these offers? Where

are they and for how much can they buy? How to reach the customers and will

it yield them maximum satisfaction? After these questions, the organisations

will then design the product, segment the markets and create awareness. This

does not only show the importance of customers in the business environment

but also the importance of satisfying them.

Customers are always aiming to get maximum satisfaction from the

products or services that they buy. Winning in today’s marketplace entails the

need to build customer relationship and not just building the products;

building customer relationship means delivering superior value over

competitors to the target customers (Kotler et al., 2002). Whether an



28

organisation provides quality services or not will depend on the customers’

feedback on the satisfaction they get from consuming the products, since

higher levels of quality lead to higher levels of customer satisfaction (Kotler &

Keller, 2009).

Relationship between Service Quality and Customer Satisfaction

Several studies found a strong relationship between service quality and

performance, market share, profitability, competitiveness, or word-of-mouth

recommendation (Parasuraman, Berry, and Zeithaml, 1991b; Newman, 2001).

Service quality entails a point of differentiation from competitors, leading to

various opportunities to enhance long-term customer relations and corporate

image, through customer satisfaction, and customer retention which cultivates

favorable word-of-mouth (Lewis, 1991; Newman 2001). Accordingly, service

quality is universally acknowledged as a victorious competitive strategy which

is healthy for both service providers and their respective customers (Newman,

2001).

Moreover, in a study by Cronin and Taylor (1992), service quality was

found to be an antecedent of customer satisfaction refuting the suggestions of

Bitner (1990) and Bolton and Drew (1991b) that satisfaction is an antecedent

of service quality. Lee et al. (2000) found further support to Cronin and

Taylor’s (1992) conclusion in addition to that of Woodside et al. (1989),

Oliver (1993), and Spreng and MacKoy (1996). Lee et al.’s (2000) results

revealed that service quality leads to satisfaction which in turn leads to

purchase intention and the link between satisfaction and purchase intentions is

stronger than the link between service quality and purchase intentions. Their



29

justification was that customers might not purchase services because of their

high quality but because they lead to higher satisfaction.

According to Cronin and Taylor (1992), factors like price,

convenience, or availability may have an effect on satisfaction and

consequently purchase intention; but may not at all affect the perception of

service quality (Cronin & Taylor, 1992, Lee et al., 2000). Lee et al. (2000)

suggest that because of this, service managers should not only focus on service

quality improvement, but also try to locate and control variables that are

related to customer satisfaction but not necessarily related to service quality.

Regarding the relationship between service quality and customer satisfaction,

Oliver (2010) suggested that service quality would be antecedent to customer

satisfaction regardless of whether these constructs were cumulative or

transaction-specific.

According to Agbor (2011), some researchers have found empirical

supports for the view of the point mentioned above (Fornell, Johnson,

Anderson, Cha, & Bryant, 1996; Spreng & Mackoy 1996) where customer

satisfaction came as a result of service quality. Moreover, Lee, Lee and Yoo

(2000) examined the direction of causality between service quality and

satisfaction. The findings showed that perceived service quality was an

antecedent of satisfaction, rather than vice versa.

Agbor (2011) noted that in relating service quality and customer

satisfaction, researchers have been more precise about the meaning and

measurements of satisfaction and service quality. Service quality and

satisfaction have certain things in common, but satisfaction generally is a

broader concept, whereas service quality focuses specifically on dimensions of



30

service (Wilson et al., 2008). Although it is stated that other factors such as

price and product quality can affect customer satisfaction, perceived service

quality is a component of customer satisfaction (Zeithaml, Bitner & Gremler,

2006). This theory complies with the idea of Wilson et al. (2008) and has been

confirmed by the definition of customer satisfaction presented by other

researchers.

Figure 2 shows the relationship between service quality and customer

satisfaction. The author presented a situation that, service quality is a focused

evaluation that reflects the customer’s perception of reliability, assurance,

responsiveness, empathy and tangibility while satisfaction is more inclusive

and it is influenced by perceptions of service quality, product quality and

price, also situational factors and personal factors (Wilson et al., 2008).

Figure 2: Customer perceptions of quality and customer satisfaction

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Service

Quality

Product

Quality

Price

Situational

Factor

Customer

Satisfaction

Personal

Factor

Customer

Loyalty



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Variable identification. The main variables were Customer

satisfaction and service quality from customers’ perspectives. The

identification of service quality that determines customer satisfaction from

past researches resulted to a better understanding of how service quality could

be a factor affecting customer satisfaction. Looking at it in this sense, it means

customer satisfaction is a dependent variable and service quality and its

dimensions are independent variable. Also if the service quality dimensions

could act as influence on service quality that will go to determine customer

satisfaction, it will mean these dimensions could be independent of service

quality. Hence service quality is the dependent and its dimensions independent

variables in the latter case as summarised in Table 1.

Table 1: Variable identification

Relationship Dependent Variable Independent Variable

Customer satisfaction and

Service quality dimensions

Customer satisfaction

Service quality

dimensions

Service quality and Service

quality dimensions

Service quality

Service quality

dimensions

Service quality and Customer

satisfaction

Customer satisfaction

Service quality

Source: Agbor (2011)

Empirical Review

The subject of service quality and customer satisfaction inter alia, has

been explored by many authors locally and internationally, some of which are

brought into perspective in this dissertation. Agyapong (2010) sought to



32

examine the relationship between service quality and customer satisfaction in

the utility industry (telecom) in Ghana. The study adapted the SERVQUAL

model as the main framework for analyzing service quality. The main

instrument for data collection was questionnaire. The questionnaire was

developed based on the stated hypothesis and also based on the SERVQUAL

model. Both open-ended and closed-ended questions were used.

The questions were on a 7-point Likert scale. The scores were coded 7

for strongly agree or strongly satisfied, 6 for moderately agree or moderately

satisfied, 5 slightly agree or satisfied, 4 for neutral or indifferent, 3 for

somehow disagree or slightly dissatisfied, 2 for disagree or moderately

dissatisfied and 1 for strongly disagree or highly dissatisfied. Multiple

regression analysis was used to examine the relationships between service

quality variables and customer satisfaction. The results showed that all the

service quality items were good predictors of customer satisfaction.

Kabir and Carlsson (2010) analysing expectations, perceptions and

satisfaction about service quality in Destination Gotland used quantitative

case-study on service quality and customer satisfaction. The case-study

consists of questionnaires that were administered to people who have

experience from travelling with Destination Gotland. A convenient sampling

(non-probability sampling) was used where 120 questionnaires were

distributed to respondents. The method for analysis was the SERVQUAL

model. The results from the different dimensions showed that there was a gap

between expectations and perceptions which means that the customers were

not fully satisfied with the service quality at Destination Gotland. On the other



33

hand, the main respondents said yes on the question of, ‘if they think the

service meet their expectations’. The result showed total gap at -0.39.

Agbor (2011) investigated the relationship between customer

satisfaction and service quality: a study of three Service sectors in Umea.

Similarly, convenience sampling technique was also used as in Kabir and

Carlsson (2010) to collect quantitative data from 300 customers of Umea

University, ICA Alidhem ( a retail shop) and Forex Bank (100 customers each

from Educational, financial and shop sectors) to get their satisfaction levels

and meaning of service quality which were substituted in the SERVQUAL

model. Chi-square test was rather used to test the hypotheses separately and in

a group.

The study showed distinctive results for the relationship between

service quality dimensions and service quality and customer satisfaction. ICA

and Forex had significant relationship between service quality and customer

satisfaction, but Umea University had no significant relationship between

service quality and customer satisfaction. Meanwhile the group result showed

that: responsiveness, empathy and reliability were significantly related to

service quality. Reliability and `empathy, were significantly related to

customer satisfaction but `responsiveness` was not significantly related to

customer satisfaction; meanwhile service quality was significantly related to

customer satisfaction.

The findings imply that service quality is not the only factor that could

lead to customer satisfaction in service sectors; that service quality dimension

varies in the different service sectors. The findings suggest that to provide

quality service in order to satisfy customers, organizations in this kind of



34

service sectors need to improve on the dimensions of service quality. Also, to

provide total satisfaction to customers, the service sectors need to improve on

the other factors that were given as reasons for satisfaction. The researcher

recommended that because the study did not consider employees who provide

the services to customers, further research could be conducted to ascertain the

relationship among customer satisfaction, service quality and job satisfaction

with the use of all the five SERVQUAL dimensions at once, to see if

satisfaction level of employees is related to their services and/or customer

satisfaction.

Nimako, Gyamfi and Wandaogou (2013) empirically examined

Customer Satisfaction (CS) with internet banking service quality (IBSQ) in the

Ghanaian banking industry. The study was a cross-sectional survey that

employed the use self-administered questionnaire to collect primary data from

a sample of 200 respondents of two banks through personal contact. The

findings were that customers of Merchant Bank, Ghana (MBG) were more

satisfied with the IBSQ than those of Ghana Commercial Bank (GCB).

Moreover, income influenced the satisfaction of customers for IBSQ

generally. It was found that, generally, customers of the two banks were

dissatisfied with the promptness of reception of responses to customer request,

the ability to be guided online to resolve problems, offering of preferentially

lower fees/ rates and charges, and reasonability of the transaction fee for

online banking transactions, but were less satisfied with the quickness of web

pages loading when using online banking transactions.

On the contrary, Pina, Torres and Bachiller (2014) analysed the

economic and technological factors that determine the quality of European



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telecommunications services. The paper tested whether the privatisation, the

efficiency and the labour factor of telecommunications operators were

determinants of service quality and whether competition, technology and

infrastructure investment in the telecommunications sector influence that

quality. Unlike the previous empirical review that used SERVQUAL

dimensions, this study used the panel data methodology to analyse the factors

that determine the quality of service of telecommunications.

The results indicated that the more efficient the company is, the more

quality it will deliver. However, the paper finds no evidence that the

privatisation and the restructuring of the labour force of the main

telecommunications operators, or the competition, technology and investments

in the sector led to greater quality. In order to foster higher quality, effective

market competitiveness has to be established to avoid benefitting the

incumbent company and to make the development of competition possible in

the long run.



36

CHAPTER THREE

METHODOLOGY

Introduction

This chapter describes the procedure adopted in conducting the study.

It specifically discusses the study organization/study area, the research design,

population, sample and sampling procedures. It further describes the

instrument for data collection, data collection procedures, ethical

considerations and data analysis.

Study Organisation/Study Area

Ghana Water Company Limited (GWCL) was established on 1st July

1999, following the conversion of Ghana Water and Sewerage Corporation

into a state-owned limited liability company under the Statutory Corporations

(Conversion to Companies) Act 461 of 1993 as amended by LI 1648. Ghana

Water Company Limited (GWCL) is a utility organisation which has a vision

to become a world class utility company delivering quality and acceptable

services based on its distinctive and best practice in the water industry.

The company is mandated to meet the ever increasing demand for better

service delivery through efficient and effective management of its core

business of production and distribution of portable water and customer

management in the urban areas of Ghana (GWCL, 2014).

As at the end of 1st quarter of 2015, GWCL operated 86 urban water

supply systems throughout the country with the installed capacity of about



37

1,112,921m3 per day. Average production was about 709,090m3 per day and

this puts plant capacity utilization at 61%. Portable water demand in the urban

areas was estimated at about 1,131,818.18m3 per day and therefore effective

urban water supply coverage was about 63.37%. Nationwide customer

strength stood at 529,709 of which 42.8% were metered and 57.2% unmetered

(GWCL, 2014).

Regarding customer service, the company (GWCL) shall respond in

writing to written complaints within five (5) working days on receipt of

complaint. The waiting time to a customer to file a complaint or make a

payment at a GWCL facility will be thirty (30) minutes. In terms of

communication, the company shall publish and review periodically a rationing

programme for areas without regular supply, review and publish periodically

non-tariff charges with respect to new services connection. In terms of

complaint resolution, GWCL shall resolve complaints associated with billing,

un-reflected payments and meter reading errors within one (1) billing cycle

(two months). Complaints associated with water quality and wrongful

disconnection shall be addressed within twenty-four (24) hours on receipt of

complaint (GWCL, 2015).

The Accra Metropolis District (study area) is one of the ten (10)

districts in the Greater Accra Region of Ghana. It is considered the city proper

and has an area of 185km2 with an estimated urban population of 2.269

million as of 2012. It is also the capital of the Greater Accra Region and of the

Accra Metropolitan District, with which it is coterminous. Accra is

furthermore the anchor of a larger metropolitan area, the Greater Accra

Metropolitan Area (GAMA), which is inhabited by about 4 million people,



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making it the second largest metropolitan conglomeration in Ghana by

population, and the eleventh-largest metropolitan area in Africa.

Accra stretches along the Ghanaian Atlantic coast and extends north

into Ghana's interior. Originally built around a port, it served as the capital of

the British Gold Coast between 1877 and 1957. Once merely a 19th-century

suburb of Victoriaborg, Accra has since transitioned into a modern metropolis;

the city's architecture reflects this history, ranging from 19th-century

architecture buildings to modern skyscrapers and apartment blocks

(En.wikipedia.org/wiki/Accra-Metropolis-District).

Research Design

The researcher used the descriptive survey to examine service quality

and customer satisfaction of GWCL in the Accra Metropolis. Fraenkel and

Wallen (2000) described the descriptive survey as “a research that attempts to

describe existing situation without actually analysing relationships among

variables” (p.70). Descriptive survey is designed to obtain information

concerning the current situation. This design was adopted because it has the

merit of gathering various responses from a wide range of people. It also

enables one to have a clear picture of events and people’s behaviour on the

basis of data collected for a particular period of time.

Furthermore, descriptive survey helps to present the true state of affairs

of a given situation after data have been collected from a number of people

who respond to the same set of questions about a given situation (Gay, Mills,

& Airasian, 2006). However, the use of this method could create problems if

questions to respondents were misleading. It could also produce unreliable

results since enquiries into private matters may make respondents feel



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reluctant to co-operate (Gay et al., 2006). Despite these limitations, the

researcher believed that this research design was the most appropriate one

which could help draw useful and meaningful conclusions from the study.

Population

Population is a group of elements or cases, whether individuals, objects

or events, that conforms to specific criteria and to which a researcher intends

to generalize the results of the research (Asamoah & Duodu, 2006). Accra

Central District of GWCL which covers the Accra Metropolis District or the

City proper has customer strength of 12,384 as at July 2014 (GWCL, 2014).

The target population from which information was solicited comprised the

above customer strength.

Sample and Sampling Procedures

A sample is a representative unit or subset of a universe (population).

Sampling procedure is the process or steps taken to select samples from a

study population. Sampling enables a researcher study a relatively small

number of units in place of the target population, as well as obtaining data that

are representative of the target population (Sarantakos, 1988). Since it was

very difficult or practically impossible to allow all the members of the three

different population types (domestic, commercial and government customers)

respond to the questionnaire due to inadequate resources and time constraint,

samples were selected for the study.

The researcher purposively selected 125 respondents from GWCL’s

customers. In purposive sampling, researchers purposely chose subjects who,

in their opinion, are thought to be relevant to the research topic. In this case,



40

the judgement of the investigator is more important than a probability sample

(Sarantakos, 1988). The sample (customers) were drawn from a stratum of

three by their type of category which was domestic, commercial and

government as shown in Table 2.

Table 2: Stratified sample size for Accra Central District of GWCL as at

July 2014

Stratum Population Sample Size

Domestic Customers 6,770 60

Commercial Customers 5,119 25

Government Departments 495 20

Total 12,384 125

Source: Field Survey, 2015.

The selection was to ensure that customers were selected across all the

areas in the Accra Central District and for that matter, Accra Metropolis.

Stratification was used to help lower known variances in the population. Thus

the use of stratified random sampling helps to increase precision and

representativeness. Indeed where the population is heterogeneous, a stratified

sample is required. This will increase the accuracy of the results, provided the

strata relevant to the investigation are chosen (Agbesinyale & Anoff, 2002).

However, the disadvantages are that; the use of unequal proportion can

compromise representativeness and can be very expensive. After the sample

for each category has been identified, the convenience sampling method was

used to select the respondents for the study. The convenience sampling

involves choosing the nearest or available individuals to serve as respondents

and continuing the process until the required sample size has been obtained

(Sarantakos, 1988).



41

Instrument for Data Collection

The instrument used for the study was a set of questionnaire for the

selected respondents. Kerlinger (1973) observed that the questionnaire is

widely used for collecting data in educational research because it is very

effective for securing factual information about practices and conditions of

which the respondents are presumed to have knowledge. Questionnaire is a

useful and widely used instrument for collecting survey information, providing

structured and often numerical data. Also, it is useful for the collection of data

without the presence of the researcher, and it is often comparatively straight

forward to analyse (Cohen, Manion & Morrison, 2005).

After intensive review of literature, the questionnaire was designed

based on the salient points in the literature review and the research questions

formulated. The questionnaire was administered to the respondents who could

read, understood and responded to the items accordingly. The questionnaire

was divided into three sections. Section A comprised of 7 items structured to

find out the socio-demographic characteristics of respondents. Section B

consisted of 7 items structured that sought customers satisfaction on the

quality of service by GWCL. Section C consisted of 12 items structured to

find out the general perception of customers on the quality of service by

GWCL. The questionnaire consisted of closed-ended and open ended

questions and some categorical questions relevant to the research topic.

Before executing the survey questions, it was evaluated by the

researcher’s mentors who were knowledgeable in research methods and finally

the researcher’s supervisor who determined the appropriateness of the wording

and responding categories for the survey population. Where respondents were



42

found illiterate, the researcher and other trained assistants turned the

questionnaire into interview schedule and read it to the research discussants

for their responses.

Data Collection Procedures

Data collection procedures are the approaches, principles, procedures

and protocols employed to obtain data relating to a particular problem or

phenomenon. Before the questionnaires were taken to the field to collect data,

the researcher took an introductory letter from the Department of Accounting

and Finance of the School of Business, University of Cape Coast. On arrival in

the Accra Central District of GWCL, I first introduced myself to the officer in

charge and then handed over to him/her a copy of the introductory letter. This

was followed by a brief explanation about the purpose of the visit.

Immediately after the briefing, I personally distributed the questionnaires to

the officers in charge to be distributed to the customers. They were given some

few days to distribute the questionnaire to the customers to complete them. In

order to ensure a high return rate of the answered questionnaires, follow-up

visits were made to the district officer to collect questionnaire from the

officers in charge. Interviews were also organised to some of the customers

who visited the office to solicit information about them on the quality of

service of GWCL in the Accra metropolis. The data collection was done

within 2 weeks.

Ethical Considerations

Research principles that include ethics of social research were

critically observed. According to Essaw (2014), social research involves other

people, groups, respondents, readers, sponsors and other gate-keepers



43

(stakeholders) including researchers who have various degree of interest or

would be affected by the outcome of the research. Ethical issues deal with the

relationships between the power differentials (sponsors, gate-keepers and

researchers). Ethics are norms, values, standards or behavior that guides moral

choices about our behavior and relationships. Ethical issues are highly relevant

and require due consideration in any research (Sarantakos, 2005). The

researcher was obliged to respect the rights, values and desires of the

respondents. Fraenkel and Wallen (2000) suggested that a responsible

researcher should be considerate, should not injure or harm the participants of

the research, keep data collected from respondents confidentially and record

information accurately among others.

In order to avoid physical and psychological harm and to see that

stakeholders’ rights are not violated, the researcher took into account practices

and procedures which lead to: protection of human and non-human subjects;

appropriate use of methodology; inference, conclusions and recommendations

based on the actual findings, and complete and accurate research reporting.

Based on these ethical issues, the researcher went through the following steps

to reach the respondents to ensure their rights were not violated. The

administration of the questionnaire was preceded by display of a letter of

introduction from the School of Graduate Studies, Accounting and Finance

Department to convince respondents to understand the background of the

research.

To ensure right to informed consent, the potential research participants

were given sufficient information to make knowledgeable decision to

participate or withdraw from participation at any stage of the data collection



44

process. Anonymity and confidentiality were ensured since questionnaire to

respondents did not require them to write their names and addresses. The

respondents were allowed to withhold any information they felt uncomfortable

in order to ensure their right to privacy. Also, appropriate methodology was

employed to conduct the research systematically and objectively. The

researcher was obliged to report findings, conclusions and recommendations

in both positive and negative manner.

Data Analysis

The study used both qualitative and quantitative data analysis.

Analysis of the responses was done in the order of the research questions.

Responses from the various categories of respondents were discussed

systematically in line with the research objectives and questions. Thus the data

that was collected was coded and sorted into themes (thematic analysis) and

the analysis and discussions were generally based on the thematic areas. The

responses to the questions were coded and entered into the SPSS computer

software for analysis and interpretation.

Coding is used where observation categories have been developed and

the items of observation are clear, specific and known in advance. Codes serve

as symbols, a shorthand recording, where actions and behaviours are replaced

by numerals or keywords (Sarantakos, 2005). To enhance visual appreciation

of the data collected, descriptive statistical tools such as percentages,

univariate and cross tabulation were used to present data collected in

summarized tables where necessary. The researcher then used interpretive,

discursive and narrative analytical methods in ascribing meaning to the data

collected.



45

CHAPTER FOUR

RESULTS AND DISCUSSIONS

Introduction

This chapter presents the findings and discussion of results of field data

obtained from the survey conducted at GWCL in Accra Metropolis. One

hundred and twenty-five (125) questionnaires were sent out to be administered

to customers in Accra Metropolis. All the 125 customers accepted to answer

the questionnaires, thus giving a response rate of 100%. The analyses were

done using frequencies, percentages, mean and standard deviation. The

chapter covers results and discussion of socio-demographic characteristics of

respondents and research objectives. In discussing the results of this study, the

researcher adopted the practice of following the research objectives and

questions systematically after the respondents’ socio-demographic data, with

the sequence of the research questions forming the order of the discussion.

Socio-demographic Characteristics

This section presents the general characteristics of the respondents.

These include gender, age, marital status, educational background and the

occupation and income levels of the respondents. Frequencies and simple

percentages have been used in representing the socio-demographic

characteristics. The statistics of respondents in respect to gender, age and

marital status of respondents is presented in Table 3.



46

Table 3: Gender, age and marital status of respondents

Variable No. %

Gender of Respondent Male 110 88

Female 15 12

Total 125 100

Age of Respondents 18-29years 20 16

30-39 years 20 16

40-49 years 35 28

50+ 50 40

Total 125 100

Marital Status Married 100 80

Single 25 20

Total 125 100

Source: Field survey, 2015.

Results from Table 3 revealed that with respect to the gender, there

were 110 males representing 88% out of the 125 respondents. The female

counterparts constituted 12%. These findings showed that majority of the

clients of GWCL were males. These outcomes also showed that majority of

the household head in Ghana are men. The data from the study indicated that

majority of GWCL’s clients were above 50 years old. This age group formed

40% of the clients. Also, 28% of the clients were between the ages of 40 and

49 years old. The 30-39 age groups formed 16% of the participants in the

study while 16% were between 18 -29 years. This implied that GWCL clients

in the Accra metropolis are made up of the old, middle class, youthful and

energetic age group.



47

It was realized that the adult class in the economy which were the

majority were well represented, showing their interest in knowing the impact

of customer satisfaction on the performance in GWCL. Majority of the

respondents were married (80%) while the rest (20%) were single. The

occupation, qualification and income of respondents were also examined

under the socio-demographic data. The information is presented in Table 4.

Table 4: Cross tabulation for employment status, educational

qualification and monthly income

Employment status Educational

qualification

Monthly income in GHS

%

600–

999

1,000–

1,499

1,500-

1,999

2,000–

2,499

Unemployed secondary/

technical 26

Total 26 21

Full time

employee of

private firm

secondary/

technical 20 19

0

tertiary/

professional 8 19

4

Total 28 38 4 56

self-employed

without

employee(s)

tertiary/

professional 20 5

Total 20 5 20

self-employed

with

employee(s)

tertiary/

professional

4

Total 4 3


From Table 4, 26 of the respondents who were unemployed earned

average income between GHS600.00 - GHS999.00 and had

secondary/technical education. A total of 56% of the respondents were full

time employees of private firm with 28 and 38 having secondary/technical

education and tertiary/professional education respectively. Among the

employees of private firm, 28, 38 and 4 respondents earned between



48

GHS600.00 – GHS999.00, GHS1, 000.00 – GHS1, 999.00 and GHS2, 000.00

– GHS2, 499.00 respectively.

A total of 20% of the respondents were self-employed without

employee(s) with tertiary/professional educational background of which 5

respondents earning a salary between GHS600.00- GHS1, 499.00. Four

respondents representing 3% were self-employed with employee(s) and had

tertiary/professional educational background. These respondents earned a

salary between GHS1, 500.00 - GHS1, 999.00. About 48% of the respondents

had formal education up to tertiary/professional while 52% had formal

education up to secondary school. This implied that all of respondents were

literates which informed their understanding of the subject matter.

Customers’ Satisfaction of the Quality of Service offered by GWCL in

Accra Metropolis

This objective ascertained customers’ satisfaction of the quality of

service offered by GWCL in Accra Metropolis. Data were collected by means

of a questionnaire. The frequency, mean and standard deviation were used for

the analysis. Table 5 illustrates the information concerning the findings.

Results from Table 5 showed that a strong majority of the respondents

(32%) were dissatisfied with the quality of service by GWCL although 20%

were fairly satisfied or very satisfied. With regards to courtesy and

professionalism of the GWCL workers, majority of the respondents (65%)

were very satisfied or fairly satisfied with their service although 40% were

dissatisfied or very dissatisfied with the service. This shows that customers

believe that the staff of GWCL shows some courtesy and professionalism in

their work.



49

Table 5: Customers satisfaction about the quality of service by GWCL

Statement Very

Satisfied

No. (%)

Fairly

Satisfied

No. (%)

Neither

Satisfied/

dissatisfied

No. (%)

Dissatis-

fied

No. (%)

Very

dissatisfied

No. (%)

1a. Overall

satisfaction.

1b Courtesy

and

professionalism

1c. Timeliness

1d. Knowledge

and expertise.

1e Clear

information

1f Fairness of

pricing.

1g Quality of

service.

15 (12)

25 (20)

25 (20)

25 (20)

10 (8)

15 (12)

15 (12)

10 (8)

20 (16)

30 (24)

20 (16)

15 (12)

10 (8)

20 (16)

30 (24)

20 (16)

10 (8)

20 (16)

30 (24)

30 (24)

20 (16)

40 (32)

40 (32)

50 (40)

40 (32)

40 (32)

50 (40)

50 (40)

30 (24)

20 (16)

10 (8)

20 (16)

30 (24)

20 (16)

20 (16)


Concerning “timeliness of getting back to you when needed”, a high

number of the respondents (48%) were dissatisfied or very dissatisfied with

the statement while 45% were very satisfied or fairly satisfied. This shows that

GWCL fails to get back to customers quickly when needed. With regards to

whether GWCL provides clear, complete and accurate information and



50

quotation, a strong majority of the respondents were dissatisfied or very

dissatisfied with the service while 20% were very satisfied or fairly satisfied

with the service. This revealed that information and quotations were not clear

and accurate to the customers. With regards to fairness of pricing by GWCL,

70% of the respondents were very dissatisfied or dissatisfied with service

although 20% were very satisfied or fairly satisfied. This indicates that when it

comes to pricing, GWCL is not fair in their service.

The findings from the above analysis implied that customers were not

satisfied with the quality of service by GWCL in the Accra metropolis. This

confirms Kabir and Carlsson (2010) study on customers’ satisfaction about

service quality in Destination Gotland. The findings also supports TARP

(1988) assertion that dissatisfied customers usually do not complain, they

usually exit, walk and talk. They start producing negative word-of-mouth

(WOM). According to Best (2009), dissatisfied customers may become

“customers terrorists. They try to ease their dissatisfaction by telling and

trying to affect the other potential customers by destroying the reputation of

the firm in the market place.

Customers’ Responsiveness to Satisfaction and Dissatisfaction

Majority of the respondents constituting 84% said their satisfaction

with the services of GWCL would make them pay their bills promptly, 8% of

the respondents said their satisfaction with the services of GWCL would make

them become very loyal to GWCL while the rest (8%) of the respondents said

that their satisfaction with the services of GWCL would make them speak

positive word of mouth. Further study revealed that satisfied customers

supported the company to meet its targets and also loyal to the company. They



51

also paid their bills promptly to increase revenue, boost morale and enhance

the company’s image. The information is illustrated in Table 6.

Table 6: Customers’ responsiveness to satisfaction

Variables No %

Prompt payment of bills 105 84

Positive word of mouth 10 8

Very loyal to GWCL 10 8

Total 125 100


This finding confirmed Anderson and Fornell’s (1994) declaration that

“customer satisfaction drives future profitability”. The result was also

supported by Churchill and Surprenant (1982) that financial gains are created

after satisfying needs and wants of customers. Majority of the respondents

constituting 79% said that their dissatisfaction with the services of GWCL

would make them not to pay their bills promptly while 9% said that the

unsatisfactory services by GWCL would make them speak negative word of

mouth to other potential customers. Other respondents (8%) said that their

dissatisfaction with the services of GWCL would make them switch to

alternative sources while the rest (4%) of the respondents did not respond.

This is shown in Table 7.

According to Best (2009), dissatisfied customers usually exit, walk and

talk. They start producing negative word-of-mouth (WOM). Sometimes the

situation gets worse. Dissatisfied customers may become “customer terrorists.

They try to ease their dissatisfaction by telling and trying to affect the other

potential customer thereby destroying the reputation of the firm in the market

place.



52

Table 7: Customers’ responsiveness to dissatisfaction

Variables No %

Non-payment of water bills 99 79

Negative word of mouth 12 9

Switching to alternative sources 10 8

Non responses 4 4

Total 125 100


Majority (60%) of the respondents did not think water tariff should be

increased to enable GWCL carry out expansion because there were lots of

wastes in the system citing leakages that took a lot of time before repairs. The

rest (40%) of the respondents agreed that water tariff should be increased to

enable GWCL carry out expansion works.

Relationship between Service Quality and Customer Satisfaction of

GWCL

The second objective sought to find out if there is any relationship

between customer satisfaction and the quality of service by GWCL in the

Accra metropolis. The mean (M), standard deviation and Durbin Watson D-

statistic were used for the analysis. The information with regards to the

descriptive statistics about customers’ satisfaction rate is presented in Table 8.



53

Table 8: Customers’ satisfaction ratings

Variables

Mean

Std.

Deviation N

1 The impression of customers about the

services provided by GWCL 2.1600 0.46537

125

1a Overall satisfaction with the quality and

services provided by GWCL 1.9200 0.63054 125

1b Courtesy and professionalism 2.0800 0.48576 125

1c Timeliness of getting back to you when

needed 2.5200 0.75852 125

1d Having the knowledge and the expertise to

meet your needs 2.4400 0.64071 125

1e Providing clear complete and accurate

information and Quotation 2.8000 0.80403 125

1f Fairness of pricing 2.5200 0.81004 125

1g Quality of service and products 2.1200 0.43298 125


In Table 8, the descriptive statistics showed that overall satisfaction

with the quality and services provided by GWCL was 1.92. Courtesy and

professionalism (2.08), Timeliness of getting back to you when needed (2.52),

Having the knowledge and the expertise to meet your needs (2.44), Providing

clear complete and accurate information and Quotation (2.80), Fairness of

pricing (2.52) and Quality of service and products (2.12). Table 9 also

presented the model summary.

Table 9: Model summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

Durbin-

Watson

1 0.646a 0.417 0.372 0.36866 2.300




54

a. Predictors: (Constant) 1a, 1b, 1c, 1d, 1e, 1f and 1g

b. Dependent Variable: 1 (i.e. the impression of customers about the

services provided by GWCL).

Information in the Model summary table indicated that the value of R-

square for the model was 0.417. This meant that 41.7% of the variation in the

impression about the services provided by GWCL (Dependent variable) could

be explained from the seven independent variables. In general, R square

always increases as independent variables are added to a multiple regression

model. To avoid overestimating the impact of adding an independent variable

to the model, some analysts prefer to use the adjusted R-square value. It

recalculates the R-square value based on the number of predictor variables in

the model. This makes it easy to compare the explanatory power of regression

models with different numbers of independent variables. The adjusted R-

square for the model was 37.2%, which indicated only a slight overestimate

with the model.

The existence of autocorrelation was diagnosed using the Durbin

Watson (D-statistic). The model recorded a DW value of 2.3 at a significance

level of 5% for a one-sided test. The test for first order auto correlation

therefore proved inconclusive since the value was very close to 2.00 for a

Decision rule of

O≤d≤4 where if;

d= 0 (extreme positive serial correlation)

d= 2 (no serial correlation)

d= 4 (extreme negative serial correlation)



55

The DW value of 2.3 therefore meant that there was a negative

correlation between the dependent variable and the independent variables

employed in the study. The results shown a positive relationship between the

other variables not captured in the model but explained the dependent variable

(Customers’ impression about the services provided by GWCL). Furthermore,

all other things held constant, the constant coefficient (B0) in the model was

0.436 if all the variables used were equal to zero. The coefficient of the

constant explained the other variables which were not included in the model.

The results suggested that, a unit change in the other variables which were not

included in the model would bring about a 0.436 increase in Customers’

impression about the services provided by GWCL. On the other hand, if the

other variables which were not included in the model should increase by a

unit, customers’ impression about the services provided by GWCL would

increase by about 0.436. It was statistically insignificant at 5% degree of

significance.

The coefficient of overall satisfaction with the quality and services

provided by GWCL was negative. It was statistically significant at 5 percent

significance level. Specifically, a one percent increase in overall satisfaction

with the quality and services provided by GWCL would cause Customers’

impression about the services provided by GWCL to fall by 0.599 percent

approximately, ceteris paribus. The coefficient of the Courtesy and

professionalism of the staff of GWCL was positive. It was statistically

significant at 5 percent significance level. Specifically, a one percent increase

in the courtesy and professionalism of the staff of GWCL would cause



56

Customers’ impression about the services provided by GWCL to increase by

0.419 percent approximately, ceteris paribus.

This study found that there was an inverse relationship between

Timeliness of getting back to customers when needed and impression about

the services provided by GWCL in Ghana though it was statistically

insignificant at the 5 percent significance level. Specifically, one percent

increase of getting back to customers when needed would cause impression

about the services provided by GWCL to fall by 0.027 percent approximately,

all other things being equal. The potency of having the knowledge and the

expertise to meet customers’ needs in explaining the impression about the

services provided by GWCL in the country was positive and statistically

significant at 5 percent significance level. A one percent increase in

impression about the services provided by GWCL would cause having the

knowledge and the expertise to meet customers’ needs to increase by 0.414

percent, ceteris paribus.

The study found that the coefficient of providing clear, complete and

accurate information and Quotation had a negative impact on the impression

about the services provides by GWCL. It was statistically significant at 5

percent insignificance level. A one percent increase in providing clear

complete and accurate information and Quotation would lead to a fall in the

impression about the services provided by GWCL by 0.062 percent

approximately, all other things remaining the same. Interestingly, the study

found that there was a positive relationship between fairness of pricing and the

impression about the services provided by GWCL, though statistically

insignificantly at the 5 percent significance level. Thus the results indicated



57

that, if fairness of pricing should increase by one percent, then the impression

about the services provided by GWCL would significantly increase by 0.087

percent, ceteris paribus.

The findings confirmed Agbor (2011) assertion that service quality is

not the only factor that could lead to customer satisfaction in service sectors;

that service quality dimension varies in different service sectors. The findings

noted that to provide quality service in order to satisfy customers,

organisations in service sector need to improve on the dimension of service

quality. Also, to provide total satisfaction to customers, the service sectors

need to improve on the other factors that were given as reasons for

satisfaction. According to Oliver (2010), service quality would be antecedent

to customer satisfaction regardless of whether these constructs were

cumulative or transaction-specific.

Customers’ Perception Regarding the Quality of Service Delivery at

GWCL in Accra Metropolis

The third objective of the study sought to find out the general

perception of customers towards the quality of service by GWCL in the Accra

metropolis. Data were gathered by the means of closed-ended questionnaire

format. Respondents were asked to select the alternatives which were

applicable to them about their perception of GWCL in the Accra metropolis.

The analysis was done using the descriptive statistics. The information

regarding the respondents’ water usage was presented in Table 10.



58

Table 10: Respondents’ water usage category

Category Frequency %

Domestic

Commercial/ industrial

Government

75

30

20

60

24

16

Total 125 100


Result from Table 10 showed that majority (60%) of the respondents

used the water produced by GWCL for domestic purposes while 24% of the

respondents used the water produced by GWCL for commercial or industrial

purposes. The rest (16%) of the respondents used the water produced from

GWCL for government purposes. This implies that most of the domestic

categories were the respondents view in this study. Respondents’ perception

indicators were also examined and the information was presented in Table 11.

Table 11: Major consumer perception indicators

Variables

N Mean

Std.

Deviation

Std.

Error

Mean

Customers’ impression about their

monthly water billing 125 2.8800 0.95642 0.09564

Customer perception about the

physical facilities (surroundings,

installations, buildings, etc.) of

GWCL

125 2.8400 0.54532 0.05453

Customers impression about the

quality of services provided by

GWCL

125 2.1600 0.46537 0.04654


Table 11 displayed the mean (M), standard deviation and standard error mean

(M) for three variables: customers’ impression about their monthly water



59

billing, Customers’ perception about the physical facilities (surroundings,

installations, buildings etc.) of GWCL and customers’ impression about the

services provided by GWCL. The respondents indicated their perceptions

using the scale between 5 for strongly agree and 1 for strongly disagree. The

researcher took the null hypothesis to be, customers are not satisfied with the

quality of service offered by GWCL in Accra Metropolis when the mean (M)

value is more than average satisfaction level of 2.5. Therefore, the alternative

hypothesis was that customers were satisfied when the mean (M) value was

less than the average satisfaction level.

The results showed that the customers were not satisfied with the

monthly water billing and their perception about the physical facility which

showed mean (M) values of more than 2.5. The null hypothesis was accepted

and it was strongly significant. The result did not favour the alternative

hypotheses. However, customers’ impression about the quality of services

provided by GWCL had a mean (M) value of 2.16. This meant that majority

of the respondents were quite impressed about the quality of service by

GWCL. From this study, it could be concluded that the level of average

satisfaction was quite low with respect to GWCL monthly billing and physical

facilities.

The results for the first two variables in Table 11 fell short of Kortler’s

(2002) submission that buyers will look for signs or evidence of the service

quality in order to reduce uncertainties. He said they will draw inferences

about quality from the place, people, equipment, communication material,

symbols, and price that they see. Therefore, the service provider’s task is to

“manage the evidence,” to “tangibilise the intangible”. This implied that



60

appreciable level of such evidence or cues was very influential in

communicating the firm’s image and purpose to its customers which

ultimately influenced their satisfaction with the service. The one-sample t-test

was also used to find the mean difference between the respondents perception.

The information was illustrated in Table12.

Table 12: One-sample t-test

Test Value = 0

95% Confidence

Interval of the

Difference

Variables T Df

Sig.

(2-

tailed)

Mean

Difference

Lower Upper

Customers’ impression

about their monthly

water billing

30.112 99 0.000 2.88000 2.6902 3.0698

Customer perception

about the physical

facilities

(surroundings,

installations, buildings

etc.) of GWCL

52.080 99 0.000 2.84000 2.7318 2.9482

Customers impression

about the services

provided by GWCL

46.415 99 0.000 2.16000 2.0677 2.2523


Result from Table12 showed that the mean (M) level of customers’

impression about their monthly water billing from respondents according to

degree of satisfaction with five-scale ranking was 2.88. It was more than the

average mean (M) response of 2.5. The t-test statistics for customers’

impression about their monthly water billing was 30.112 and the significance

level was 0.000. This meant that the null hypothesis was accepted and the

alternative hypotheses rejected with a high level of confidence. The customers



61

were not satisfied with the high pricing of water consumed since there was

erratic water supply.

The mean (M) level of customers’ perception about the physical

facilities (surroundings, installations, buildings) of GWCL according to degree

of satisfaction with five-scale ranking was 2.84. It was assumed that the null

hypothesis was the mean (M) response to customer perception about the

physical facilities (surroundings, installations, buildings) of GWCL which was

more than 2.5. The t-test statistics for customers’ impression about the

physical facilities was 52.080 and the significance level was 0.000. This meant

that the null hypothesis was accepted and the alternative hypotheses rejected

with high level of confidence. The customers were dissatisfied because some

of the pipe lines passed through gutters and unhealthy places. In the event of

pipe bursts or leakages, other foreign material like bacteria might enter the

lines.

The mean (M) level of Customers impression about the services

provided by GWCL according to degree of satisfaction with five-scale ranking

was 2.16. It was assumed that the null hypothesis was the mean (M) response

to Customers impression about the services provided by GWCL was less than

2.5. The t-test statistics for customers’ impression about the services provided

by GWCL was 46.415 at a significance level of 0.000. This meant that the null

hypothesis was rejected and the alternative hypotheses accepted with a high

level of confidence. The general perception of customers on the quality of

service by GWCL was also examined and the information is presented in

Table 13.



62

Table 13: Customers’ perception on the quality of service

provided by GWCL

Variable

N Mean

Std.

Deviation

Std.

Error

Mean

Notified before service is interrupted 125 1.9600 0.19695 0.01969

Type of billing problem 125 2.1600 0.36845 0.03685

customers’ impression about their

monthly water billing 125 2.8800 0.95642 0.09564

Customers bill reflect their

consumption 125 3.6000 0.49237 0.04924

Customers made complaint to GWCL 125 1.2800 0.45126 0.04513

Customer perception about the

physical facilities (surroundings,

installations, buildings etc.) of

GWCL

125 2.8400 0.54532 0.05453

Area GWCL is doing well 125 3.4000 0.94281 0.09428

Customers impression about the

services provided by GWCL 125 2.1600 0.46537 0.04654


From Table 13, it was realized that the mean (M) value for the

‘Notified before service was interrupted’ was 1.96 which meant majority of

the respondents said that GWCL did not inform or notify their customers

before their services were interrupted. The mean (M) value for ‘Type of

billing problem faced by customers of GWCL’ was 2.16 which meant majority

of the respondents agreed that high estimate was one major problem facing

GWCL in the Accra Metropolis. The mean (M) value for ‘Customers bill

reflect their consumption’ was 3.6 which showed majority of the respondents

said their monthly water bill did not reflect their consumption.

Also, the mean (M) value for ‘Customers had complaint about the

services provided by GWCL was 1.28 which meant majority of the

respondents said they had complaint about the services provided by GWCL.

All of the respondents who had complaint said they were physically present in



63

the offices of GWCL. The mean (M) value for ‘Area where GWCL is doing

well’ was 3.4 which meant majority of the respondents said that the area

where GWCL was doing well was Staff polite/friendly.



64

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Introduction

This chapter gives an overview of the study. It also presents the

summary of the major findings, conclusions, recommendations and limitations

of the study and suggestions for future studies. The primary objective of the

study was to find out the service quality and customer satisfaction of GWCL

in the Accra metropolis. The study concentrated on the customers’ satisfaction

of the quality of service offered by GWCL in Accra Metropolis, relationship

between service quality and customer satisfaction of GWCL in Accra

Metropolis and customers’ perception of the quality of service delivery at

GWCL in Accra metropolis.

Summary of Findings

The study revealed that GWCL clients in the Accra metropolis were

made up of the old, middle class, youthful and energetic age group. It was

realized that the adult class in the economy which were the majority were well

represented, showing their interest in knowing the impact of customer

satisfaction on the performance in GWCL. It was also revealed that customers

believe the staff of GWCL shows some courtesy and professionalism in their

work. Again, the study revealed that GWCL fails to get back to customers

quickly when needed. With regards to whether GWCL provides clear,

complete and accurate information and quotation, a strong majority of the



65

respondents were dissatisfied or very dissatisfied with the service. This

revealed that information and quotations were not clear and accurate to the

customers.

The study also revealed that when it comes to pricing, GWCL was not

fair in their service. Also, the complaints made by the customers of GWCL on

the quality of service took longer time to be resolved. But it was identified

that GWCL trained its staff to efficiently handle customer complaints and

serve them better. It had a standby and rapid response teams to repair

leakages and burst. The company also gave prior notice to customers before

major service interruptions. The study found out that there was an inverse

relationship between Timeliness of getting back to customers when needed

and impression about the services provided by GWCL in Ghana though it was

statistically insignificant at the 5 percent significance level. The potency of

having the knowledge and the expertise to meet customers’ needs in

explaining the impression about the services provided by GWCL in the

country was positive and statistically significant at 5 percent significance

level.

The study found that the coefficient of providing clear, complete and

accurate information and Quotation had a negative impact on the impression

about the services provided by GWCL. It was statistically significant at 5

percent insignificance level. Interestingly, the study found that there was a

positive relationship between fairness of pricing and the impression about the

services provided by GWCL, though statistically insignificantly at the 5

percent significance level. Thus the results indicated that, if fairness of pricing

should increase by one percent, then the impression about the services



66

provided by GWCL would significantly increase by 0.087 percent, ceteris

paribus.

The results showed that the customers were not satisfied with the

monthly water billing and their perception about the physical facility which

showed mean (M) values of more than 2.5. However, customers’ impression

about the quality of services provided by GWCL had a mean (M) value of

2.16. This meant that majority of the respondents were quite impressed about

the quality of service by GWCL.

Conclusions

The following conclusions were offered concerning the analysis of the

data and compilation of information gathered from the review of literature.

The customers were not satisfied with the quality of service by GWCL in the

Accra metropolis. It could be concluded that the level of average satisfaction

was quite low with respect to GWCL monthly billing and physical facilities.

However, with regards to providing complete and accurate information and

quotation, customers had their complaint unresolved. It could be deduced that

GWCL occasionally notified its customers for major repairs and maintenance

schedules while majority of their service interruptions were not communicated

to its consuming populace. The customers were not satisfied with the high

pricing of water consumed since there was erratic water supply. They were

also dissatisfied because some of the pipe lines passed through gutters and

unhealthy places. In the event of pipe bursts or leakages, other foreign

material like bacteria might enter the lines.



67

Recommendations for Policy and Practice

In the light of the above research findings and conclusions, the

following recommendations are made:

Management of GWCL should improve their service by replacing old

and weak pipe lines, obsolete plant and equipment with new ones.

Pressure management should be strengthened by GWCL to check pipe

burst.

Management should ensure accurate monthly billing and improve upon

its physical facilities especially offices and major installations.

Management of GWCL should inform customers before supply is

interrupted to improve public relations to ensure service quality.

Frontline staff of GWCL should attend to customer complaints and

give prompt feedback to customers. Also all complaints should be

resolved within 48 hours if possible.

Provision of the necessary logistics, staff training/motivation and

equitable management decisions for staff welfare should be

encouraged to improve organisational climate which would eventually

enhance employee-customer interactions.

Management should also apply contemporary customer service

concepts to ensure service quality and customer satisfaction which

would ultimately lead to profitability. GWCL should establish a

research unit that would be proactive to investigate service quality and

customer satisfaction levels.



68

Limitations of the Study

Every research has limitations and this particular one is no exception.

Financial difficulty constrained the researcher to gather information from a

small sample size instead of the entire population of the chosen area for the

study.

Suggestion for Further Research

Similar research could be carried out in all the remaining districts especially in

areas where water used to flow frequently but are now having problems

leading to some form of rationing to also obtain their perception. The research

could be extended to other major cities like Tamale, Kumasi, Tema and

Sekondi-Takoradi in order to evaluate on a wider scale, the nature of the

quality of service rendered by GWCL in Ghana.



69

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APPENDICES



81

APPENDIX A


SCHOOL OF GRADUATE STUDIES – BUSINESS SCHOOL

MASTER OF BUSINESS ADMINISTRATION (GENENERAL

MANAGEMENT)

QUESTIONNAIRE FOR CUSTOMERS

As part of the requirement for the award of MBA (General Management), I am

conducting a survey into “Service Quality and Customer Satisfaction of

Ghana Water Company Limited in Accra Metropolis”.

I would be very grateful if you could support this survey by completing this

questionnaire and your candid response would be very much appreciated. The

research does not probe into your private affairs but I am interested in your

personal perception and experience of water supply in the Accra Metropolis.

Your answers would only be used for empirical analysis in the framework of

this research. Your anonymity is assured and any information you provide

would be used for academic purpose and treated as strictly confidential.

Please indicate your response number in the box provided at the end of the

response options or write your response where appropriate. Thank you.

SECTION A: Socio-demographic characteristics of respondents

Introduction

This section deals with the socio-demographic characteristics of respondents

for data analysis and interpretation. Kindly tick (√ ) the alternative which

applicable to you.

1. Gender: (a) Male (b) Female

2. Age (years): (a) 18 – 29 (b) 30 – 39 (c) 40 – 49 (d) 50+



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3. Marital status (a) Single (b) Living with partner (c) Married

(d) Separated (e) Divorced (f) Widowed

4. Highest level of educational qualification achieved/completed

(a) Basic (b) Secondary/Technical (c) Tertiary/Professional

(d) Others (specify)……………………….

5. What is your employment status? (a) Unemployed (b) Full time

Employee of private firm (c) Full time employee of public firm

(d) Self-employed without employee(s) (e) Self-employed with

Employee (s) (f) Casual worker (g) Apprentice (h) Domestic employee

(i) Retired (j) Other (specify)…………………

6. What is your monthly take-home income in Ghana cedis (GH¢)?

(a) <160 (b) 160 – 599 (c) 600 – 999 (d) 1,000 – 1,499

(e) 1,500 – 1,999 (f) 2,000 – 2,499 (g) 2,500 – 2,999

(h) 3,000 – 3,499 (i) 3,500 – 3,999 (j) 4,000 4,499 (k) 4,500 – 4,999

(l) 5,000 – 5,499(m) 5,500 – 5,999(n) ≥ 6,000

(0) Other (specify)………………………

7. What is your status in the household? (a) Owner (landlord/lady)

(b) Tenant (c) Parent of owner (b)Wife of owner (d) Husband of

Owner (e) Child of owner (f) Other (specify)…….…….

SECTION B: Customers satisfaction on the quality of service by GWCL

Introduction: This section examines the customers’ satisfaction on the

quality of service by GWCL’s. Kindly tick (√ ) the alternative which

applicable to you

1. Please rate your satisfaction with the services and products provided by



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GWCL on each of the following attributes. (Very satisfied =1, Fairly

satisfied = 2, Neither satisfied nor dissatisfied = 3, Dissatisfied = 4 and

Very dissatisfied = 5

Variables 1 2 3 4 5

1a) Overall satisfaction with the quality and services

provided GWCL

1b) Courtesy and professionalism

1c) Timeliness of getting back to you when needed

1d) Having the knowledge and the expertise to meet your

needs

1e) Providing clear, complete and accurate information and

Quotation

1f) Fairness of pricing

1g) Quality of service and products

2. If you are satisfied with the services of GWCL, what do you do to support

GWCL? (a) Prompt payment of bills (b) Positive word of mouth

(c) Very loyal to GWCL (d) Reporting illegal water activities in the

Community (e) Others (specify)…………….

3. If you are dissatisfied, how do you react to the poor services of GWCL?

(a) Non-payment of water bills (b) Negative word of mouth

(c) Switching to alternative sources (d) Customer terrorism

(e) Other (specify)…………….

4. Do you think water tariff should be increased to enable GWCL carry out

expansion projects? (a) Yes (b) No

5. Please assign reasons to your answer to question F4………………………

………………………………………………………………………………..

6. How often do you pay your water bills? (a) Monthly (b) Bi-monthly

(c) Quarterly (d) Annually (e) Others (specify)……………



84

7. Please give suggestion(s) that you think could improve the service quality,

customer satisfaction and performance of GWCL…………………………

………………………………………………………………………………

SECTION C: Perception on the quality of service to consumers

Introduction: This section explores the general perception of quality of

service to consumers. Kindly tick (√ ) the alternative which applicable to you.

1. Respondent’s water usage category:

(a) Domestic (b) Commercial/Industrial (c) Government

(d) Other (specify)……………

2. Are you notified before service is interrupted? (a) Yes (b) No

3. What is your impression about your monthly water bill?

(a) Low (b) Average (c) High (d) Very high

4. Does your bill reflect your consumption? (a) Yes (b) No

5. Have you ever made a complaint to GWCL? (a) Yes (b) No

6. If NO to question 5, Skip 7, 8 and 9. If YES to question 6, what

was the mode of communication? (a) Phone (b) Physical presence

(c) Letter (d) Email

7. How long did it take to hear from GWCL? (a) Within 24 hours

(b) 2 - 6 days (c) one week (d) 2 - 3 weeks (e) one month and above

(f) Other (specify)……………..

8. What was the result of your complaint? (a) Resolved (b) Pending

(c) Unresolved

9. If resolved, what is your impression about the results? (a) Very satisfied

(b) Fairly satisfied(c) Neither satisfied nor dissatisfied (d) Dissatisfied

(e) Very dissatisfied



85

10. How do you perceive the physical facilities (surroundings, installations,

Buildings etc.) of GWCL? (a) Excellent (b) Good (c) Average

(d) Poor

11. Which of the following areas do you consider GWCL does well?

(a) Good/efficient service (b) Prompt response

(c) Staff polite/friendly (d) Staff helpful/Supportive

(e) Staff efficient/Knowledgeable (f) Easy/Quick to contact

12. In general, what is your impression about the services GWCL provide

to you? (a) Very satisfied (b) Fairly satisfied (c) Neither

satisfied nor dissatisfied (d) Dissatisfied (e) Very dissatisfied



Documents

SERVICE QUALITY AND CUSTOMER …...customer satisfaction and service quality are antecedents of customer loyalty. In addition to customer loyalty, customer satisfaction significantly